If an Industry's Long-Run Per-Unit Costs Decrease as Its Output

question 304

Multiple Choice

If an industry's long-run per-unit costs decrease as its output increases then

• A) the firm's long-run economic profits must be less than zero.
• B) the firm is most likely a decreasing-cost industry.
• C) the firm is most likely an increasing-cost industry.
• D) the firm is most likely a constant-cost industry.

---

Definitions:

Power Company

A corporation that generates, transmits, and distributes electricity to consumers and businesses.

Expected Payoff

In decision theory and economics, the weighted average of all possible outcomes of a decision, where each outcome is weighted by its respective probability of occurrence.

Perfect Information

A situation where all participants have full and equal knowledge about the game structure, strategies, and outcomes in decision-making scenarios.

Candy Store

A candy store is a retail establishment specializing in the sale of confections, chocolates, and various types of sweets.